CONCLUSIONES Y RECOMENDACIONES

Waldinger et al. (1990) suggest a model which can provide context for analy- sis of ethnic entrepreneurship. They propose that immigrant economic activ- ity results from taking advantage of opportunity structures using ethnically mobilized resources (see Figure 3).

Figure 3:Interactive model of ethnic business development. Source: Waldinger, Aldrich and Ward 1990, p. 22.

The opportunity structures they define include historically shaped cir- cumstances which enable (and constrain) ethnic entrepreneurship. The ex- tent to which they work in favor of immigrant entrepreneurs may result e.g. from the amount of market control the non-ethnic group would like to re- tain. Consequently the primary market on which ethnic entrepreneurs may

find business opportunities can be the internal, ethnic consumer market. The specificity of this market and the advantage ethnic entrepreneurs may have over non-ethnic businessmen lays in the knowledge of specific needs and tastes of ethnic consumers. And so in terms of product markets these could be enterprises which supply ethnic food, clothing, books, newspapers, movies etc. A far as services are concerned ethnic communities have demand for support in all immigration and assimilation related issues such as travel, legalization procedures etc. The authors go even as far as claiming in many cases immigrant may prefer personal contacts to formal market transactions because of their cultural embeddedness.

Yet if ethnic business were to satisfy only ethnic demand, their possibili- ties of growth would be very limited if the number of immigrants would not rapidly increase. Moreover, products and services offered to impoverished co-ethnics are relatively unprofitable. Of course there are also the upsides of operating within an ethnic community - the availability of a pool of employ- able labor makes it possible to expand business and relations of trust and understanding make up for costly employment contracts.

It becomes obvious even based on the above description, that what is really needed to boost ethnic enterprises though, is access to the open market. The types of industries, where immigrants are most likely to be able to set up the enterprises are constitute specific niches:

• where mass production technology does not apply and where mass dis-

tribution is unnecessary. Waldinger et al. (1990) recognize such niches in under-served or abandoned markets such as the food retailing in- dustry in small neighborhoods or dense city centers, where large su- permarkets are not feasible,

• where there are low economies of scale. Here once again the food retail

industry provides an example especially when taking into consideration the possibility of self-exploitation of ethnic entrepreneurs e.g. by means of working longer hours. The taxi business also makes the case as when immigrants become willing to drive the cab longer hours than natives or if they manage to pool human resources so that a car is on the road 24 hours seven days a week, than they can successfully compete with non-ethnic companies, even if the latter had the first-mover advantage.

• where there is instability and uncertainty. Waldinger et al. (1990) re-

fer to Piore’s market segmentation theory to indicate that the efficient place of small firms is in industries which large companies find to risky to get involved in. Greater elasticity of that market also leads to lower entry costs and possibly high capital-to-labor ratios makeing it acces- sible to immigrant entrepreneurs.

• where ethnic goods are in demand. Just as pointed out in the paragraph

goods or services. If a demand for these good and services arises in the open economy (Thai massages, Indian food, ethnic handicrafts etc.), immigrants may easily win the competition with natives in that sector due to their inherent knowledge concerning the product.

Summarizing Waldinger et al. (1990) also point to the fact that the crucial factor for ethnic entrepreneurship development is whether co-ethnic employ- ees can acquire entrepreneurial skills on the job.

Access to ownership is the second component of opportunity structures. The mere existence of markets does not mean that immigrants have access to them and that they can freely operate their own business. Two factors are responsible for this: 1) the number of available business-ownership roles together with the native demand for these opportunities and 2) government polices aimed at immigrants. The authors recognize that one way in which immigrants could access the market with their business is by “ecological suc- cession”, i.e. taking over enterprises of natives who no longer find it profitable to remain in operation (e.g. due to the changed social structure of neighbor- hoods, where the native population no longer replaces its self, but is rather replaced by immigrants). Another reason for decreased preference for busi- ness ownership among the natives may be the less and less appealing posi- tion of small business in contrast to the emerging multinational corporations where prominent positions can be obtained. As time passes, though, and groups with along immigration history become more and more assimilated and similar in their employability and aspiration to the native population, the ecological succession might occur between two ethnic communities rather than between the natives and one ethnic community.

As far as government policies are concerned, what must be taken into consideration when analyzing migrants’ opportunities for business establish- ment, are both the policies related to entry and settlement and policies re- lated to business operation. Countries may be restrictive in both of these aspects, in one of them, or neither. In some cases the opportunities of (legal) business setup may be contingent on one’s immigration status, in other cases irrespective of the immigration status, access to certain professions (e.g. as- sociated in guilds) may be blocked, even for the natives. These procedures will nevertheless affect both - the number and specialization of self-employed immigrants.

Apart from the somewhat external factors creating opportunity struc- tures Waldinger et al. (1990) suggest that the immigrant group’s own charac- teristics would also effect the rates of entrepreneurship. These characteristics are divided into predisposing factors and possibilities of resource mobiliza- tion.

ownership relate to their situation both in the destination country and in the home country. At destination the inability find a better job or impossi- bility of upward mobility in the open market due to lack of skills or lack of recognition of skills makes self-employment a viable strategy. Activities which seem unprofitable for the natives may be actually marginally lucrative for immigrants particularly due to this “blocked mobility” (see section 2.3 The

discrimination hypothesis) and compared to not working at all, their returns

to self-employment may be of great relative value. Moreover, the notion of selectivity of migration, with the most able and less risk-averse pursuing this strategy in the first place, may also contribute to the high “natural” propen- sity for self-employment among immigrants. The potential temporariness and objective-oriented reasons for migration, together with familiar job hierar- chies and greater concern about economic mobility rather than social status may also contribute to the willingness to pursue even marginally profitable business activities.

Resource mobilization, the second component of group characteristics heavily relies on the concept of ethnicity its self. As the this particular ap- proach to defining ethnicity in the context of entrepreneurship has been dis- cussed (see section 1.1.2 Self-employment or entrepreneurship? Immigrant

or ethnic?) here we will focus only the implications of ethnicity on resource

mobilization strategies.

Social networks among immigrants affect ethnic entrepreneurship on a very early stage, even before migration takes place. Networks provide ini- tial information based on which one makes his/her decision to migrate, they may facilitate the process of settlement making it relatively easy to make the transition between the country of origin and the destination. Later on they remain a highly valuable resource in terms of satisfying business startup needs. In case of limited access to open market resources such as start-up capital, labor force, technical assistance etc. pooling resources via linkages with co-ethnics may be the easiest, cheapest or often the only way in which such assets can be obtained (for an example of circumstances under which this may not be the case see: Nestorowicz 2008). But close ties between eth- nics also serve less obvious purposes: 1) offsetting the harsh conditions of the social and economic environment at destination by creating support mech- anisms, 2) organizing, otherwise potentially anomic, social relations and 3) via informal organizational resources providing a substitute for undeveloped or malfunctioning institutions of social organization, what enables gaining relative advantage over the natives.

Of course how close these ties are and to what extent a potential en- trepreneur can rely on them depends on the migration process its self and the position of newcomers in the established ethnic community. Once the ethnic ties are utilized, though, they can be subsequently used and gains could be passed on in lieu of ethnic reciprocity and trust, thus reinforcing

the ethnic identification and scope and scale of support. Close social ties and the trust they breed can be crucial in terms of access to capital, information and business partnerships.

If the government does provide access to the market (what, as indicated above, is an important component of the probability of immigrant business start-ups), it may or may not provide actual resources supporting immi- grant self-employment. Provided that they see the benefits of immigrants’ self-sufficiency and even the possibility of generating employment for other, otherwise excluded, immigrants, governments may allocate special financial or infrastructural resources to members of ethnic communities. This would also be an alternative to obtaining necessary resources from the hostile open market.

Given the framework described above, Waldinger et al. (1990) look for explanations of why self-employment rates may differ across ethnic groups. The main categories by which the immigrant communities differ are: 1) pre- migration characteristics, 2) the circumstances of migration and the ways they evolve and 3) postmigration characteristics.

Among the premigration characteristics the authors focus on human cap- ital attainment by migrants. The primary question may be whether immi- grants possess skills or education which is in demand on the host labor mar- ket and which is recognized as such. It might be the case that despite being highly skilled, migrants can not find a position that matches their qualifi- cations because the signaling effect of their education depreciates as they arrive in a new socioeconomic setting. A complimentary skill to formal or professional education is also language, and in more general sense, cultural competence. The secondary issue is whether immigrants have skills which give them a competitive edge in business. If they do, self-employment may be a very compelling strategy. That being said we may look at the issue from the opposite point of view and note that if an ethnic group either has skills which can be remunerated in the open market or does not have skills which - even if used to provide products or services - are not in significant demand, such a group would have low rates of self-employment because of it’s internal characteristics present already in the premigration period.

The circumstances of migration also may differentiate the rates of self- employment in various communities. The main difference appears in the dichotomy of permanent vs temporary migration. Assumed permanence (or very long, undefined duration) of stay seems to be a necessary condition for choosing self-employment. Setting up one’s business entails sunk costs. In order to generate net returns to self-employment one must have to be in operation long enough to offset these costs and only then start generating additional income. An opposite story can also be told, though, namely that temporary immigrants, whose duration of stay is short may want to earn as much as possible in the shortest possible time, thus opting for the possibly

more lucrative strategy of becoming self-employed. Waldinger et al. (1990) doubt this hypothesis though, due to the high risks of running one’s own business and thus the greater possibility for returning home after a short time having earned nothing or even being indebted. Among permanent im- migrants there may also be increased levels of distress related to the blocked mobility on the host labor market. Such circumstances may also push people into self-employment. The last but not least factor is the possible presence of family in case one pursues a permanent migration pattern. This takes off the financial burden of sending home significant amounts of remittances and allows to invest any savings in business establishment.

Among postmigraton characteristics Waldinger et al. (1990) emphasize the importance of the position of an ethnic group in the host economy. Having access to a preestablished, ethnically dominated sector will decrease the cost of obtaining information. Being able to work in strategic occupations, i.e. those which enable acquisition of skills sufficient to stat one’s own business might be another type of benefit. Immigrants belonging to ethnic communi- ties which are already present in the host economy and which are willing to provide support may have greater propensity to engage in self-employment than immigrants who upon arrival do not have access to such group resources. Ways in which ethnic entrepreneurs take advantage of the opportunity structures given their group characteristics Waldinger et al. (1990) label eth-

nic strategies. These strategies are aimed at tackling the seven most common

problems: 1) obtaining information, 2) generating start-up or development capital, 3) acquiring necessary entrepreneurial skills, 4) labor recruitment, 5) establishing and developing relationships with customers and suppliers, 6) dealing with competition and 7) responding to political attacks. The possibil- ities and eventual ways of addressing these issues emerge from the constraints and enabling mechanisms embedded in the market structures and ownership possibilities as well as from the specificity of predisposing factors and the potential of resource mobilization.

Bonacich (1993) questioned the approach of Waldinger et al. (1990) blam- ing it for a pro-capitalist perspective, i.e. that the described social processes are nothing but a product of the forces of supply (group characteristics) and demand (opportunity structures). Bonacich also points out that the emer- gence of ethnic entrepreneurship, as described, seems not to be a product of the desires of the groups in power. Among the reasons for “nurturing” ethnic entrepreneurs by the majority Bonacich mentions 1) their role in legitimiz- ing the ideas of capitalism (pursuit of profit, protection of private property rights, free competition etc.), 2) securing cheap subcontractors for big busi- nesses, 3) serving as “buffer” middleman minorities and finally even as 4) “ideological weapons” by presenting certain ethnic groups as “model minori- ties” (Bonacich 1993, p. 690-691). Eventually, she claims, the ruling majority

designs such institutions, which rule out other possible forms of immigrant incorporation. Missing this larger politico-institutional picture in analysis of ethnic entrepreneurship may thus actually imply missing the significance of the whole phenomenon.

In a rather recent work Putz (2003) reexamines the interactive model looking form the perspective of cultural characteristics of immigrant groups. He accuses the “opportunity approach” of being structuralist in it’s nature and thus not being able to explain well enough why individuals react to the same opportunity structures in different ways. He suggests extending the existing analytical frameworks by inclusion of paradigms derived form the theories of action and decision-making. He insists on putting greater emphasis not only on the structural conditions, but also on the objectives and strategies of action-oriented agents.

He also offers criticism of the “resource” side of proposed analytical ap- proaches, which do make an attempt at incorporating culture-specific notions in to the models, but which at the same time are based on two fallacies, namely that: 1) immigrant communities are homogenous (so that way in which resources are e.g. “ethnic” applies to everyone in the same way) and 2) immigrant communities have a common ethnic foundation (their life strate- gies are determined by the culture of the place of origin, which - by means of

cultural demarcation - would be distinct from the culture of the destination).

Consequently he proposes that:

• no generalized and ultimate statements about culture be made, as even

if individuals act in a similar way, their reactions are interpretations of culture, rather than culture per se,

• culture should be conceptually treated as a process rather symbols

which have fixed meanings and interpretations of those meanings,

• only statements on single, constantly changing “cultural phenomena”

be made, as treating culture as a whole or it’s components as static is in reality a conceptual impossibility,

• situational rather than general interpretations be in place,

• that not only social relations and integration into social networks be

treated contextually, but that spaces themselves gain recognition as having symbolic significance for - and across - individuals.

Volery (2007) combines the original interactive model with the exten- sions proposed by Putz and comes up with a amended proposition of how opportunity structures and resources are utilized by individuals as their “ethnic strategies” of dealing with the challenges they face as immigrant entrepreneurs (see Figure 4).

Figure 4:Enhanced interactive model in the context of entrepreneurship. Source: Volery 2007, p. 36.

In Volery’s understanding there are two distinct, yet interconnected di- mensions - the ethnic dimension (elements on the outer circle) and the en- trepreneurship dimension (the inner elements). On one hand this model does not separate entrepreneurial and ethnic aspects of immigrant entrepreneur- ship, and on the other hand it takes into consideration individual features which may be useful for explaining why individuals with the same ethnic background react differently to present opportunities. The entrepreneurship dimension is responsible for explaining the entrepreneurial process as such, without regard for the “ethnic” aspect of immigrant entrepreneurship. The ethnic dimension creates opportunities and threats specific to immigrants (or particular immigrant groups). How individuals recognize, evaluate and exploit these opportunities, though, is described by the entrepreneurial pro- cess, not the ethnic one.